Business - Wace urges FRRP to probe Novo

Pre-press group Wace has written to the Financial Reporting Review Panel claiming that Photobition, a company involved in a hostile bid for the group, had fallen short of accountancy standards during a past takeover.

Photobition announced its intention to purchase Novo Group in early 1997.

In a Stock Exchange statement Wace said it had calculated that Novo’s profits collapsed from #1.5m per half year to around #123,000 prior to the acquisition. They climbed to #3.9m after the deal’s completion.

Wace has now asked the FRRP to look at issues surrounding FRS 6 relating to the acquisition. FRS 6 requires companies to make disclosures in their financial statements for the period in which an acquisition took place.

‘According to our workings, the profit stream from Nova does not seem to be constant and our concern relates to the fact that our shareholders are being asked to accept Photobition shares as part of the bid. If there is any doubt concerning their policies regarding FRS 6 then they need to be brought to light,’ said Wace.

Photobition said its actual profit before tax figure was #2.9m, not #3.9m as claimed by Wace.

A spokesman added: ‘This is a hostile bid and they are trying to find copy to knock Photobition and its share price. The suggestion that we inflated the profit figures is nonsense.’